This briefing note provides an overview of the process and legal considerations for a person who is not domiciled in the Cayman Islands to write a will dealing with his or her shareholding in a Cayman Islands company. It is not legal advice and it should not be relied upon as such.
In this briefing note the person who owns shares in the Cayman Islands company is referred to as the Shareholder.
Regardless of whether or not the Shareholder leaves a will, a grant of representation must be obtained from the Grand Court of the Cayman Islands to administer the Shareholder's Cayman Islands assets after his or her death. Where the Shareholder leaves a will, the form of grant is known as probate. Where the Shareholder does not leave a will, the form of grant is known as letters of administration.
A will is formally valid in the Cayman Islands if its execution conforms to the law of (i) the place where the will was executed, (ii) the Shareholder's domicile, habitual residence or nationality at the time the will was executed, or (iii) the Shareholder's domicile, habitual residence or nationality at the date of his or her death. It is therefore important to ensure that a will is formally valid under the law of the Shareholder's domicile.
We will prepare a will that (i) expresses testamentary intention, (ii) is to be signed at the end, and (iii) is to be signed in the presence of two witnesses. If further formalities are required under the law of the Shareholder's domicile, please let us know.
Who can be appointed as an executor?
An executor is a person appointed by will to administer the estate of a deceased person. The executor's main functions are to (i) identify the assets and liabilities comprised in the estate, (ii) to pay all debts and funeral expenses, and (iii) to distribute the estate to the beneficiaries or heirs as determined by the law. The executor does not necessarily have to be a beneficiary or heir of the estate.
Under rule 37(3) of the Probate and Administration Rules (2008 Revision), a grant of probate may be made to the executor named in a will that is (i) admissible to proof (i.e. it complies with the formalities described above), and (ii) is written in English.
A Shareholder can therefore choose who he or she wishes to be appointed as executor to his or her estate. There are no restrictions on who can be appointed to act as executor.
Who can benefit from the Shareholder's estate?
A will of moveable property is materially valid if it conforms to the law of the Shareholder's domicile at the date of his or her death. Shares in a Cayman Islands company are moveable property. Material validity of a will means the validity of the gifts contained in a will. A will therefore cannot be used to override forced heirship rules in the place where the Shareholder is domiciled.
Why write a specific will to govern the succession to shares in a Cayman Islands company?
- The Shareholder can choose (i) who to appoint as executor, and (ii) to the extent permitted by the law of his or her domicile, who the beneficiaries of his or her estate will be.
- The Grand Court of the Cayman Islands is familiar with the form of a Cayman Islands will. This helps to expedite the application for a grant of probate.
- An application for a grant of probate of a Cayman Islands will can be commenced shortly after the Shareholder's death. The application can run concurrently with any applications in other countries. There is no need to wait for an application to be concluded in another jurisdiction.
- Any questions as to the interpretation of a will are to be determined according to Cayman Islands law.
Care should be taken when updating wills in other jurisdictions to ensure that the Cayman Islands will is not revoked or superseded the in future.